Harvard’s Aid to Middle Class Pressures Rivals

Just days after Harvard University announced this month that it would significantly expand financial aid to students from families earning as much as $180,000 a year, William G. Durden, president of Dickinson College in Carlisle, Pa., got a query from a student’s father, asking whether the college would follow Harvard’s lead.

“He even said, ‘I know this costs a lot of money, but you should do it anyway,’ ” Dr. Durden said. The president replied that Dickinson, a small liberal arts college where the full annual cost of tuition, fees, room and board nears $45,000, did not have the money to match Harvard’s largess.

Because of Harvard, Dr. Durden said ruefully in recalling the exchange, “a lot of us are going to be under huge pressure to do these things that we just can’t do.”

By substantially discounting costs for all but the very wealthiest students, Harvard shook up the landscape of college pricing. Like Dr. Durden, officials of other colleges say its move will create intense pressure on them to give more aid to upper-middle-class students and will open the door to more parental price haggling.

Some colleges had already been moving to eliminate loans from all their financial aid packages and replace them with grants. In the weeks since Harvard’s announcement, a stampede of additional institutions — the University of Pennsylvania, Pomona, Swarthmore, Haverford — have taken the same step, which will help middle- and upper-middle-income families.

But Harvard, in adopting that practice, has also gone far beyond it: for families earning $120,000 to $180,000 a year, costs will now be limited to about 10 percent of income, meaning that students from such families will pay a maximum of $18,000, a deep discount from the university’s full annual cost of more than $45,600.

Officials at colleges without anything like Harvard’s $35 billion endowment say a rush to give tuition discounting to the middle and upper middle class at institutions like theirs could end up shifting financial aid from low-income students to wealthier, make pricing seem even more arbitrary and create pressure to raise full tuition to pay for all the assistance.

“Harvard has started to redefine the financial aid landscape, and it’s redefined it in a way that is quite beneficial to the wealthiest institutions,” said Jenny Rickard, dean of admissions and financial aid at Bryn Mawr. “It is just a handful of schools that can really respond this way, but it leaves others kind of pulling their hair.”

In the competitive scramble for prestige and rankings, numerous colleges already try to lure some top students away from the Ivy League by showering them with “merit aid” even if they are well off and can afford full tuition. The practice is controversial, with some college administrators scorning it as a way of “buying” a better incoming class, sometimes at the expense of lower-income students.

Some administrators say there will now be pressure to provide more merit aid to relatively wealthy high achievers, reducing the amount available to poorer students.

“It could lead to schools’ doing this sort of thing because they want to be part of the top group,” David W. Oxtoby, president of Pomona College in California, said of Harvard’s move. If that meant those colleges had to reduce the number of their low-income students, Dr. Oxtoby said, “that would be terrible, exactly the wrong outcome.” (Pomona itself, where full costs are more than $45,000, does not provide merit aid.)

Some academics who study higher education predict that Harvard’s decision may even reduce economic diversity at Harvard itself, even though the university already allows any admitted student from a family earning $60,000 or less to attend virtually free of charge.

Donald E. Heller, director of the Center for the Study of Higher Education at Pennsylvania State University, said that if Harvard’s new aid program encouraged more middle- and upper-middle-income students to apply, then the number of slots for low-income applicants in an entering class would probably decline.

“They’re just going to get crowded out,” Dr. Heller said.

William R. Fitzsimmons, dean of admissions at Harvard, said that the university was committed to helping poorer students attend but that years of research had shown that students from families in the middle and upper-middle class were not even applying, most likely because they had decided that the price was simply unaffordable.

“People were voting with their feet,” Dean Fitzsimmons said. “It was pretty clear that we were missing out on some pretty exciting students.”

Parents and other critics have complained for years that tuition has steadily increased faster than the rate of inflation, and college affordability has become an issue in Congress. Senator Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee, has suggested that colleges be required to spend more of their endowments as a condition of keeping their tax-exempt status. And a bill approved by the House Education and Labor Committee last month would seek to shame, by listing publicly, those colleges that raise tuition significantly faster than their peers.

But administrators at colleges without enormous endowments to help them cut student costs say they fear that Harvard may have created a wave of haggling by families and made college pricing and student aid packages seem even more opaque.

“It will educate those parents into thinking, ‘Eighteen thousand dollars a year is what we ought to be paying; why should we have to pay more than that?’ ” said John Strassburger, president of Ursinus College, where full costs are currently $43,160.

Jonathan Burdick, dean of admissions and financial aid at the University of Rochester, where costs are nearly $45,000, said: “Harvard has made it harder for everybody. They’ve given fuel to the argument that colleges are charging more than they should.”

Ms. Rickard, dean of admissions and financial aid at Bryn Mawr, where total costs run over $45,000, said the college had so far resisted substituting grants for loans because it would make it harder to spread aid as widely. “The reason we have the loans is it enables us to support more students,” she said.

For some public universities, Harvard’s move provided a rationale to argue for more state assistance to hold the line on student costs. Robert J. Birgeneau, chancellor of the University of California, Berkeley, where total costs are roughly $25,000, said, “My intention, frankly, is to use the Harvard announcement to try to exert pressure on the government of California to increase resources for financial aid.”

And in New York, State Senator Kenneth P. LaValle, a Republican who heads the Senate Higher Education Committee, said he would introduce legislation to provide enough state aid to limit to 10 percent the amount of income that a middle-class family — which he defined as one earning up to $150,000 — would have to pay for college.

“It’s Harvard,” Mr. LaValle said. “They created a new paradigm. People will pay attention to it. And we need to pay attention to the affordability issue as it applies to middle-income taxpayers.”

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